Rand extends losses against the USD

The South African Rand has extended it’s overnight losses against the dollar as the Reserve Bank Monetary Police Committee continues to meet with governor Gill Marcus under pressure from unions to drop interest rates.

At 11h45 Central African Time the rand traded at 7,4350 against the dollar after earlier falling to 7,4450, compared to yesterday’s close at 7,3450.

And the Rand has also dropped on reports that top businessman Cyril Ramaphosa has suggested that the Bank reduce rates to help stimulate the economy.

Most analysts polled by Business Day said Marcus would not drop rates - however the market has reacted today as speculation grows that the SARB MPC may decide to reduce the interest rate.

At the moment the bank repo rate is at 7% and has remained at that rate for 3 months even as the Rand gains 30% against the dollar, making exports more difficult as South Africa competes in Rand terms against other mid-ranking economies.

The Bank has reduced its repo rate by five percentage points since December, but not in the previous 3 months.